Phulbari Energy News

Monday, March 16, 2009

ET ReportProf. Hossain Mansur of Geology Department of Dhaka University said that appropriate initiative must be taken without delay to explore and exploit coal as alternative fuel to ensure the required power generation in accordance with the election pledge of Awami League. For this, he said, the decision for open pit mining to extract coal from Phulbari is required to be taken on priority basis."But to work out the modality, the government must set up a high powered committee now comprising of representatives of Asia Energy, civil society who are opposed to mining at Phulbari and line professionals," he told the Energy & PowerThe EP Editor Mollah Amzad Hossain took the interview of Prof. Hossain Mansur, who is also an ex chairman of Petrobnagla. Following are the excerpts:

EP: What's your observation about the energy infrastructure development plans or guidelines of Awami League-- having proven track record of successfully managing energy sector from 1996-2001-- which has returned to state power?

HM: Let us have an objective view of election agenda before making subjective analysis. Possibly this is for the first time since liberation of Bangladesh any political party formally declared well defined short, medium and long term planning for developing energy infrastructure to confront prevailing and emerging energy crisis.It has been planned to generate additional 5000 MW power in the next 5 years. Generation from different viable alternatives-- natural gas, coal, nuclear and renewable source have been envisioned in the plan. Party energy vision till 2021 has also been included there. Government has spent only about 50 days in state power. There cannot be any doubt about the competence of the persons entrusted to implement the plan. Moreover, Prime Minister herself is monitoring it. But for this the implementing agencies have not been restructured yet. I hope this will be done soon.Everyone is aware about prevailing crisis of competent professionals in the energy sector. Resolving this crisis is also a major challenge for the new government. Engaging an energy expert as advisor of energy sector during caretaker government was also a right decision.

EP: Do you think the government's plan to engage an expert committee for this sector will create positive impact?

HM: I think it to be a good initiative of the Prime Minister. Committee formed with real energy experts of the country will definitely bring positive impact.

EP: There are court cases against PM Sheikh Hasina and ex PM Khaleda Zia regarding NIKO-BAPEX joint venture for marginal gas field development. What are your views about it?

HM: Head of the government has prerogative to approve any decision in the greater interest of the country. PMs considered this agreement as beneficial for the country. These cases are purely political. If there has to be any genuine case of corruption in energy sector that has to be for leasing out Jalalabad gas field. BNP government handed over a discovered gas field to Occidental for a mere 22 million US dollars. But the government now has already purchased 24,000 US$ worth of gas from this field.

EP: Oil Gas & Port Protection Committee claims that there had been major irregularities in Niko agreement. You are associated with their movement. Now you are telling there was no irregularity. Then why you are still with their movement?

HM: Look the committee has several unreasonable demands like opposing offshore exploration; open pit coal mining. Niko is also one such. I don't agree with the committee on these. It is not possible as an expert to agree with them on these issues. But I worked with them to resist export of natural gas. I am with them on this. I am trying to make them understand their mistakes.The left politicians who are staging agitation on oil, gas and port protection know it very well that they will never come to state power. That is why they have taken negative stand on reasonable issues.

EP: Let us again discuss on election pledges of Awami League. Do you think it is possible for the government to realize the pledge?

HM: Look in 1996 when Awami League came to power the government also inherited similar crisis situation in energy sector. Concurrently with expediting ongoing projects government encouraged massive gas exploration initiatives. Moulvibazar gas field was discovered. World Class Bibiyana gas field was also discovered. Sangu offshore gas field was brought into production. BAPEX developed Salda Nadi Gas Field.On the other hand new power plants were set up after finalizing IPP policy within very short time. Side by side private sector power plants were also set up. For these actions generation increased from effective capacity of 1,500 to 3,000 MW. Consequently first three years of BNP government did not witness any crisis although they failed to set up a new plant during that time.Now when Awami League led government is again in power the installed capacity of power is 5,450 MW. Some of the aging plants are derated so the real installed capacity is now reduced to 4,950 MW. For ongoing maintenance 680 MW can not be generated. Gas supply crisis also impedes generation of about 500-700 MW. So the available effective generation capacity is now 3,600-3,800 MW. This is not much different to what Awami League government left behind in 2001.During the last term of Awami League government there was no crisis of gas supply. There was demand supply balance… I mean security of supply in the national gas grid. But now when public and private sectors have plans to set up power plants having capacity of 3,000 MW Petrobangla can not guarantee gas supply to more than 1,000 MW generation. So power generation as per its declared vision is a great challenge for the government. So not only actions for increasing power generation but also actions to source fuel for power are also major challenge. Even a single day must not be wasted in hesitating and sitting on decisions.In my opinion if the government sincerely intends to realize its election pledge in energy sector it must take decision for offshore exploration in the Bay of Bengal as soon as possible.On the other hand, appropriate planning needs to be made reviewing the situation whether gas supply will be possible to all planned gas based power plants. If there is uncertainty these must be dual fuel plants.As a geologist I am optimistic that more gas fields will be discovered in Bangladesh. But natural gas alone can not meet the requirement of power generation. We must diversify fuel option. We need coal. This is our only major viable option. Import of hydro electricity is another option. There is scope for nuclear power generation also. We have to work on renewable power generation. But renewable energy cannot be a substitute for fossil fuel based power generation.Government alone do not have resources or capacity for required power generation. We have to rely on private sector investment from both local and foreign sources. So we must identify areas of energy value chain for foreign direct investment keeping our national interest above everything.

EP: Will you elaborate your opinion on feasibility of alternative fuels other than coal that you have mentioned.

HM: There is very little scope to expand our own hydroelectricity generation. But hydroelectricity import is only possible through regional initiatives. It has to come from Nepal and Bhutan. Both the countries have enormous hydroelectricity generation potential. India is currently importing power from them.Bangladesh has to take political decision and try to catalyze four-nation joint initiative to import hydroelectricity. It is a long-term option.The government has taken some initiative for nuclear power generation. But environmentalists are divided in opinion on nuclear power generation. Government must keep this into consideration also.

EP: You have said that coal is the only feasible option. But we are locked in various debates regarding coal exploration. How exploration can start resolving the current impasse?

HM: Please remember Bangladesh has 2.5 billion tonnes of proven coal reserves. It is possible with available technology to extract at least 1 billion tonne. Exploration from the largest reserve Jamalganj is not commercially viable in traditional method. We are mining coal from Barapukuria by underground method. But due to wrong decision we can only extract about 5 million tonne by 2011. This underground mine will create massive depression and subsidence in the mine area. It can never be restored and rehabilitated. The subsidence process has already commenced. Due to wrong decision it will not be possible to even extract 20-25% coal in place. It will be unwise to set up any new coal fired power plant based on Barapukuria coal.

EP: So you are saying exploration of coal in Barapukuria by underground method is a wrong decision?

HM: Look I am a geologist. Bangladesh geology in the mine area does not support underground mining. If we like to mine commercially it has to be open cut method only for shallow coalmines. Water management is major challenge here. Open pit mining can support recovery of 90% coal in place. In 5-10 years most of the mine area can be restored to original state. Only the final pit about 20% can be converted to a sweet water lake. This will be a massive asset for Bangladesh, a major source of power generation and other use.It should be mentioned here that 1,400 crore taka has already been spent to develop Barapukuria mine and 1,600 crore taka has been spent to set up mine mouth power plant. But due to inappropriate mining method the investment is under great risk. The property and assets of the people of the region are endangered.

EP: You are telling Bangladesh should follow open pit mining method to explore coal. But, the Oil, Coal and Port Protection Committee is opposed to it.

HM: Look the movement was not against open pit mining. The committee movement was basically due to lack of trust on the then government. Actually it was not mining method rather it was lack of trust on the 4 party alliance government which crystallized the movement.

EP: But it is being told resettlement is a huge problem in case of open pit mining. How do you think about it?

HM: There is international law. Bangladesh also has land acquisition rule. Our neighbour India has extensive experience of open pit mining. In Bangladesh about 3-3.5 lakh people may need to be rehabilitated from mining region for open pit mining for development of all the mines. For a democratic government it may not be a major challenge considering the overall national benefits that availability of huge coal resource and its manifold use would bring about good impacts.

EP:You are suggesting steps to start coal mining must be taken without wasting a day even. How it is possible? Where exploration should start at first?

HM: I believe action to set up coal based power plant installation must start if possible from today. To make coal based power available mining must start at Phulbari first. The reason behind this is that only Phulbari mine is now ready after discovery and other extensive studies.I also believe that exploration of natural resource will invariably have environmental and social impacts. There will not be any exception here also. But all actions must be taken to mine coal making minimum impact on environment and protecting the rights of affected population.

EP: In that case which company will implement Phulbari Mining? The government has an agreement with Asia Energy.

HM: After signing an agreement there is no scope to disoblige it. It could be more appropriate if an agreement like PSC with provision for cost recovery and exploration-exploitation could be concluded. That would have better protected Bangladesh interest. On the other hand it has to be decided upon discussion whether Asia Energy or government will carry out open pit mining at Phulabri. But we must keep in mind that extensive government support is a must for mining by Asia Energy or any other company at Phulbari.

EP: Then what you suggest to make the start?

HM: Decision should be taken by the government constituted high powered committee comprising of Asia Energy, agitating civil society representative right now on Phulbari mine development. If necessary the government may seek assistance from Australia, Germany and of India who have vast mining experience. These countries have extensive expertise and experience of coal mining.Simultaneously the government must finalize the coal policy eliminating provision of coal export. There is no scope to waste time waiting for coal policy anymore.

EP: So are you talking about mining at Khalaspeer and Dighipara also?

HM: Not at all. I have talked about Phulbari only. The alliance government awarded the lease permission to a Bangladeshi-Chinese JV for Khalaspeer without inviting tender. This must be investigated. No initiative should be taken for mining before proper investigation. Petrobnangla has also signed MOU with a Korean Company for mining at Dighipara. It should also be investigated. Without tender no mining lease should be given to anyone anymore.

EP: What are your views on proposed tri-nation gas pipeline and other regional energy cooperation initiatives?

HM: It was a wrong decision for Bangladesh not to proceeding with the tri-nation gas pipeline initiative. Besides, Bangladesh must actively participate in other SAARC, BIMSTEC, Central Asian and Middle Eastern energy ring and grid projects. This must be done in view of our long-term energy security.

Sunday, October 26, 2008

Khondkar Abdus SalequeRecently the author had opportunity to read a report on Phulbari Open pit Coal Mining of Bangladesh, “Open Pit Mining for Coal: Horror Feeling Shrouds Northern Bangladesh.” It will not be prudent to challenge the contents of the report. But there are ways to mitigate the social and environmental impacts associated with coal mining, any mining. Exploration and exploitation of any natural resource has some form of impacts. These need to be managed and mitigated. A country like Bangladesh with finite natural resources cannot have the luxury to keep its resources buried for ages and continue to suffer from energy crisis. Some sacrifices need to be made unfortunately for greater gains of community. Some decisions need to be taken from head keeping the heart open.Bangladesh as we all know is on the grip of the worst ever energy crisis. For various reasons its predominantly monofuel energy generation, supply is on the verge of collapse. Industrial growth has almost become stand still; authorities are struggling to meet the demand of existing consumers. Crisis still persists even after making various load management and adjustments. Government does not have many options. It is extremely difficult for a developing economy like Bangladesh to import all its energy needs from very expensive and competitive world energy market. Extensive exploration and development for Petroleum may discover a few more gas reserves or expand the existing reserves. But these may not be enough to ensure the long term energy security of a country which can achieve a double digit growth for several years if only smooth supply of energy could be ensured. Bangladesh is believed to have about 65-70 tcf equivalent very high quality (High heat content, low ash content) bituminous coal reserve in the northern part of the country. Some of the discovered mines are at relatively shallow depth.

The prevailing geology (water saturated Dupitilla Overburden above coal layer) makes these ideal for surface — open pit mining. The other traditional option underground mining may be risky, uneconomic and not viable. We all know that surface mining can produce 85-90% coal in place while underground mining can produce only 20-25%. Both options have extensive environmental and social impacts. Surface mining will obviously impact the people of the region. They will need to the relocated, adequately compensated, properly rehabilitated. Other environmental concerns and impacts are to be appropriately mitigated.Bangladesh, a resource constraint country has very limited capacity of its own to take up mining with its own technical and financial resource. What can Bangladesh do? Can it wait and let its economy suffer irreparable damage or should it start mining in the most appropriate and economic method to explore most of its coal addressing all environmental and social issues as far as practicable? Bangladesh is not the one and only country of the world where these kinds of issues exist which complicate decision-making. But the countries have taken initiative to mine and mine economically taking the most appropriate economic mining options addressing all social and environmental impacts. Environmental groups are stronger in other countries. But government is also pro active and very alert to the people’s well fare. Mining proceeds without much fuss and national economy benefits from appropriate mining methods. But in Bangladesh government remains perplexed, hesitates to take decision, national energy security continues to go from bad to worse. Why the government is not trying to learn?Many non-resident Bangladeshis are engaged in appropriate research in reputed universities on environmental and social impacts of mining; few Bangladeshi professionals are also working in similar active mines. Instead of hearing from horses mouth why Bangladesh Government is getting confused from various myths and propagandas of a motivated section of society when business community and local entrepreneurs are urging government to take immediate decision on coal mining? The author has talked with few line professionals and some researchers in Australia and is presenting the lessons learned about the impacts of mining and mitigation measures.A unique readiness to develop and deploy new technologies has enabled Australian minerals industry to endure the tough times, reap the benefits of the current resources expansion, and confront the industry’s pressing environmental responsibilities. The Australian mineral industry does more than use of technology to mine smarter. It is a world leader in the actual development of new mining technologies aimed at improving the industry’s performance. Beyond the discovery of the more effective and efficient ways of finding and extracting minerals, this innovation results in better ways of reducing environmental impacts, more effective ways of rehabilitating areas disturbed by mining, safer an healthier ways of working in the mines and more efficient ways of marketing and exporting products and services.Mining & SustainabilitySome people say that the concept of “sustainability is increasingly emptied by unsustainable activities such as mining. Mining provides number of goods but it is base on the extraction of non-renewable resources and is unsustainable. Despite opposition from anti-mining campaigners, mining has been officially declared as “sustainable” in the world summit on Sustainable development. Humanity definitely needs certain amount of minerals to satisfy basic needs and it is also equally true that over consumption in one part of humanity may cause adverse impact on the livelihoods and environments of the other humanity, at the receiving en of mining. What is required is a perfect balance. Mining is an activity that needs to very properly planned with all probable and possible impacts identified, evaluated and mitigation planned. Mining is an activity that needs strict monitoring and control at every stage. People living in mining areas should have the capacity to take fully –informed decisions on the permissions to mine in the territories or decide on how to carry out activity and ensure environmental conservation and social justice.

What is Mining?Mining refers to the discovery and extraction of n minerals, metal or non metal , lying under the surface of the earth .Metals are mixed with many other elements , but occasionally large quantities of certain metals concentrate in a relatively small area are as deposit. The impacts of mining are related to mining itself, which frequently involves or produces hazardous substances.Mines vary in size according to extraction/ production per day. The method of mining specific mineral depends on the type, size and depth of the deposits and economic and financial aspects of the undertaking. Underground mining used to be the most commonly use method to extract large deposit until the middle of the 20th century. Technological progress and development of larger and more powerful machinery after the Second World War promoted opencast mining. The underground mines generally have less visible impacts on the environment than opencast mines. There is less disturbance of the grounds surface but it can affect the water by contaminating with acids and metals and by intercepting aquifers. The workers are exposed to more hazardous situations than those working in opencast mines. Progressively underground mining is being abandoned due to problems of profitability. Presently 60% of the materials mine in the world is extracted by opencast method causing devastation of ecosystem.Opencast mines look like a series of terraces arrange in great deep wide pits in the mile of a desolated and stark landscape, lacking any living resources. Quarries are surface mines, very similar to open cast mines, resulting in a desolated landscape with deep trenches between wide steps. Chemicals are used in leach mining to dissolve the metals from the mineral containing it, obtaining a very high rate of recovery. The chemical contaminates the surface and ground water.Environment and social Impacts of MiningMining is short-term activities with long-term effects. It is carried out in various stages, deposit prospecting and exploration stage, mine development and preparation stage, mine exploration stage and treatment of mineral stage-each involving specific environmental impacts. Preparation of access routes, topographic and geological mapping, geophysical work, hydro-geological research, deforestation of the land and elimination of vegetation affecting the habitats of hundreds of endemic species, consequent erosion and silting of the land, reduction of water table, contamination of the air, water and the land by chemicals such as cyanides, concentrated acids and alkaline compounds and air pollution caused by dust, gases and toxic vapour can have diverse affect on the environment and health and social life of the local communities.Sulphur dioxide released from the mine causes acid rain, carbon dioxide and methane released by burning fossil fuels are the two greenhouse effect gases causing climate change. The sound of the machinery and the blasting in mining conditions that may become unbearable for local people and the forest wildlife.

The Impacts of Mining on Women:Mining also has distinct impacts an added burden on women. The women are deprived of the access to the benefits of mining developments, especially money and employment. Women become marginalised as the traditional roles of food gatherer, water providers, care – givers and nurturer are very much affected. Many women are pushed to enter into informal economy to find additional sources of income as the adverse impact to the environment caused by large –scale mining decrease the productivity of the fields and poisoned wild foods, marine life and animals. Alcohol abuse, drug addiction, prostitution, gambling, incest and infidelity increase in many mining communities which worsen cases of family violence against women, active and often brutal discrimination of the women in the workplace that is sanctioned or ignored by judicial and political institution.

Lessons To Be Learnt From Australia:

Mining of coal and other mineral resources are one of the major backbones of Australian economy. Australians are no less environmental conscious nation than any. This is a country where freedom of speech, independent press, very transparent policies, and equal rights are prevalent. So it should not be considered irrelevant if one prescribes to follow Australian way of addressing and mitigating the social and environmental impacts of mining. Bangladesh can be immensely benefitted if it learns from Australian experience and trains its mining professionals in Australian mining industry.Let us have an insight into the sustainable planning for managing the impacts of mining at Moranbah and Bowen basin in Queensland, Australia.Coal Reserve in the Bowen Basin• The Bowen Basin coalfield is one of Australia’s primary coal mining areas.• Sufficient known reserves exist in the Bowen Basin for over 200 years at current extraction rates.• The coalfield has some 20 operational mines, with a further 10-15 under consideration or in the early development stage.• Future development activity over the next 5-10 years is likely to be concentrated in the Moranbah and Nebo areas.Issues to be Managed• Expansion of mining operations• Increase in workforce to support expansion• Rapid increase in Moranbah’s population — permanent and transient• Accommodating the workforce/population growth• Constraints on town expansion — coal reserves• Balancing local and State interests – valuable coal resources versus town expansion• Immediate, short, medium and long term management issues.• Mine expansion issues:– Environmental Impacts• Air quality• Noise• Water• Land disturbance• Mine rehabilitation• Mine subsidence• Methane gas emissionsManaging the IssuesŸ The Minister for Environment, Local Government, Planning and Women decided that the State will assist the Belyando Shire Council in resolving the issues associated with growth at Moranbah by:– establishing a Moranbah Growth Management Group (MGMG); and– preparing a Mining Town Sustainable Management Framework.The main task of the Moranbah Growth Management Group is to assist the Belyando Shire Council to prepare and achieve broad agreement to a Master Plan for short, medium and long-term options for sustainable management at Moranbah.• Membership of the Group is to comprise– Jim Pearce, MP (Chair);– Belyando Shire Council;– Department of Local Government, Planning, Sport and Recreation;– BMA;– Anglo Coal;– Department of Natural Resources, Mines and Water;– The Office of the Coordinator-General; and– Others as required.• The Moranbah Growth Management Group will identify issues, policies and options, which may be taken to the Coal Industry Taskforce for consideration. The Coal Industry Taskforce regularly reports to Cabinet Budget Review Committee on the progress of the Coal Infrastructure Program of Actions and will incorporate reporting on the Moranbah Growth Management Group into these reports.Issues identified by MGMG– The need to identify options to manage immediate and short term growth– The timing and sequencing of development options to manage growth, which may also influence a correction in the housing market– The need to consider medium and long term issues to ensure sustainable management of Moranbah– Water supply– Management of the cumulative impacts of the current expansion of mining operations and any future plans to establish open cut mining operations in close proximity to MoranbahSustainable Management in Mining TownsPlanning for Sustainable Communities– Managing the cumulative social, economic and environmental impacts– Managing cultural impacts– Managing the urban lifecycle - stages of growth (urbanization), decline (suburbanization), and rejuvenation (reverse urbanization)– Managing risks– Collaborative approach– Corporate Social Responsibility– Balancing a productive mining industry and sustainable and vibrant communities– Capacity for economic diversificationSustainable Management Outcome StatementProtecting social, economic, cultural and environmental values and economic growth for the State for future generations in meeting community and mining industry interests. Through the State and local governments, the mining industry and communities are working collaboratively to support sustainable and vibrant communities and a productive mining industry.Sustainable Management in Mining TownsPlanning for Sustainable Communities– Managing the cumulative social, economic and environmental impacts– Managing cultural impacts– Managing the urban lifecycle - stages of growth (urbanization), decline (suburbanization), and rejuvenation (reverse urbanization)– Managing risks– Collaborative approach– Corporate Social Responsibility– Balancing a productive mining industry and sustainable and vibrant communities– Capacity for economic diversificationIn the past, Australian mining industry has had to overcome problems associated with harsh physical conditions and remote locations. Advanced technologies have been employed to reduce the high cost of operating in such adverse circumstances. A powerful motivating factor encouraging the use of new technologies has been the need to minimise the environmental impact of minerals industry activities. Such adoption and adaption of innovation has enabled the mining industry to survive decades of tough times, when it barely recovered the cost of investment capital. The industry has been able to employ technology to increase supplies even when prices were down, environmental and social stewardship responsibilities increased.Advanced Technology in ExplorationAir borne geophysical techniques are important in modern exploration. Remotely sensed data obtained from platforms in space and in air provide high-resolution images of the earth’s crust. When these are combined with other data in sophisticated imaging and modelling softwares, they enable the identification of targets for detailed ground investigation.Innovative Technology for Extraction and ProcessingIn mining and mineral processing, Australia is leading the world in harnessing new technologies such as biotechnology, ICT and e-commerce.Examples includeThe continual refinement of mine shapes and designs using advanced computer-modelling software. Use of intelligent robotic ore loaders in mining processes. Australia is also a world leader in the development of a comprehensive industry wide policy to improve heath and safety, both mineral operation and surrounding communities. Projects have aimed to improve the safety of drilling equipment, examine wear and tear of plant and equipment, develop risk analysis methods for the running of mine side operation and employ behavioural studies to examine issues such as fatigue management and impact of shiftwork on sleep management.

Environment Impact Mitigation MeasuresThe Australian mining industry is committed to achieving continual improvement in its environment management performance. This is demonstrated through strategic leadership initiatives such as “Enduring value- the Australian Minerals Industry Framework for Sustainable Development”Some of the key technologies assisting the industry to minimise resource use and mitigate contamination risks are:Dust suppression and soil stabilising products, which save up to 80% of the water normally used while also reducing labour and equipment costs.Oxygen probes develop by CSIRO, capable of assessing levels of gaseous or dissolve oxygen concentrations in soil, ground water, bioreactors and tailing storage facilities in order to monitor potentially toxic waste.Bio -fixation treatment system, which remove most contaminants and pollutants from waste water, effluent or soil, minimising environmental impact and providing a low n-cost treatment for the removal of suspended solids, ammonia and nitrogen.Gas, ground water, aquifer and subsidence management in minesNew technology for the revegetation and rehabilitation of mined environments, such as Ecosystem Function Analysis technique developed by CSIRO.Bangladesh sooner or later will have to start coal exploration. Given the geological, geophysical reality of the mine belt underground mining at least in Barapukuria and Phulbari will never become economically viable. Pursing this will be waste of time, energy and money. The population directly impacted can be relocated, compensated and rehabilitated. There are proven technologies to address all the perceived environmental impacts. Bangaldesh must realise the domestic coal industry will take 20 years to develop skills and capacity to even plan, manage mining and operate. We have to engage major mining companies, which have greater skills, appropriate technologies and greater all-round capacities to address and mange all challenges of mining in Bangladesh. Our policy must have adequate incentives to encourage major mining companies. Small companies with inadequate resources and technology will take us for rides like the Chinese company in Barapukuria .It will benefit a particular section of society to squeeze benefit. Delay in coal mining will frustrate our efforts to attain energy security. It will benefit the coal importers and smugglers and their beneficiaries who want our coal to remain buried. Will facilitate neighbouring country to continue dumping poor quality coal to pollute our environment. Will Bangladeshi patriotic politicians judge the situation in its truest perspective?Source: http://www.ep-bd.com/news.php?cat_id=9&archive=11&namee=ARTICLE

Wednesday, September 24, 2008

Direct cancellation of an agreement signed by a sovereign government creates an environment of mistrust about the country. “It’s not comfortable at al for a country for its image abroad,” said Annisul Huq, the President of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex body of the countries cham Direct cancellation of an agreement signed by a sovereign government creates an environment of mistrust about the country.“It’s not comfortable at al for a country for its image abroad,” said Annisul Huq, the President of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the apex body of the countries chambers and trade bodies.“I think the government should sit with the people who are demanding to scrap the agreements. At the same time the government should also sit with the parties with whom it signed the agreements,” he said adding “it will pave the way for an amicable solution for all. If there is any clause, which is against the interest of the country, he said, it will be detected in the discussion table. “And I think we’ll be able to resolve it with consensus,” said Annisul Huq. “People in the government responsible for this shouldn’t linger the process and reach consensus through discussions,” said the FBCCI President in an interview with the Energy & Power. The EP Editor Mollah Amzad Hossain took the interview. Following are the excerpts:EP: How do you evaluate the infrastructure of the country, specially the energy infrastructure?AH: If we talk about infrastructure, supply of energy is now the biggest problem in Bangladesh. In meetings of the Better Business Forum we categorically said that industrial and business development will come to a standstill if we fail to ensure energy supply. You know the Better Business Forum has five working groups. They made 260 recommendations as urgent tasks. Of these, the infrastructure development group made 90 suggestions. The key aspect of the recommendations is that the main obstacle towards economic development is lack in energy supply. How do you expect industrial development if you can’t give electricity. The number one problem is now energy. Here the question comes up… where the electricity will come from if there is lack in gas supply. We know the present generation capacity is 5,300 megawatt, but our demand is higher. On the other hand, the actual generation is 3,500-3,750 megawatt. One of the reason is gas crisis. Also, there are some units which are 40 years old and some were not maintained properly. As a result, now the main problem now emerged as not getting electricity for industries. There is no alternative to ensure power supply. We categorically told the government that neither domestic nor foreign investment will take place if electricity supply is not ensured.EP: Board of Investment is a very important body for investment in the country. Don’t you think energy sector investment is also involved with the BOI?AH: You must know we proposed the government to restructure the BOI for making it an effective organization. Before that we visited Australia, New Zealand, Hong Kong, Thailand and Malaysia and witnessed their works. At present 14-15 first class officers work in the BOI. We proposed to take the number to 135. At the same time, we approached to go for a competitive higher salary structure for them instead of government structure. If our proposal is implemented, the BOI will really work as a one-stop service. There will be a cell named Invest Bangladesh which will bring investment. But, you know there will be no use of bringing investment if there is no energy. Here I want to mention that the BEPZA now has all kinds of infrastructure. They have plots, have power supply facilities. But the BEPZA will not be able to supply electricity if the present state of gas supply continued. Now the number one priority should be ensuring energy supply.EP: What’s your suggestion for increasing electricity generation in shortest possible time?AH: We already gave some recommendations as urgent tasks for the government. One suggestion is rehabilitating the public sector old and unskilled power plants through private investment. The government started works on that. A policy is being drafted by the Power Division. I’m mentioning this as there is gas supply for those plants. If the units are rehabilitated we can get more electricity from the plants. Also, we approached that the small units in the private sector can be expanded as there is also assurance of gas supply to those areas.EP: We saw in newspapers that you in the meeting of the Better Business Forum recommended to go for coal production to overcome the electricity crisis.AH: Yes. We told the government that there is gas crisis in the country. But there is scope to go for coal-based power plants. So, we don’t have apprehension of primary energy. But, we have to produce coal at first. Many countries in the world are utilizing coal resources by managing the environmental and social problems. You know coal plays the leading role in power generation in India, China, USA, South Africa and many other countries. If they can manage the environmental problems and utilize coal for power generation why not we? It’s true there are challenges relating to environment and local people if we go for coal exploration. But, this is not a unique problem for Bangladesh. There are similar problems for all the countries who have coal resources. I think the problems should be resolved through discussion, timely decision and their implementation. And this is the main challenge now. What will happen if we sit idle and don’t take decision? It will ensure more and more power crisis for lack in primary energy and finally stop the investment and industrialization. In that case there will be no scope of economic development. I think we shouldn�t waste a single day. The government has to take pragmatic decision with discussions in the top level. Our back is on the walls.EP: We have coal that can meet the country’s primary energy demand. But, reality is that we are debating years after years. A coal policy couldn’t be finalized in last couple of years.AH: It’s really a concerning matter. The government shouldn’t sitting idle without resolving the questions raised about the foreign investment. But, you know producing coal is not the only answer. The coal-based electricity will be costlier, can be double than that of present tariff. But, also we can’t waste time and resources only because that the price will be higher. Whatever the price is we need electricity. The price of coal-based can be seven taka per unit, but it’ll be 10 taka if we generate power from imported oils. The coal policy has become a sensitive issue. If we can’t make it transparently there will be new bureaucratic complex. I doubt that the government which will come to power after the election will be able to do this overcoming all kinds of vested interests. Also, the present government is also in the last stage. I don’t think they will be able to finalize the coal policy at this stage. On the other hand, the intellectuals and experts are not in consensus. Also, we can say their opinion is influenced in different ways. So, it’s really a tough job, specially taking a right decision. Still we have to produce coal and we have to take decision right now.EP: Chittagong is now at the most vulnerable stage in terms of energy crisis. However, the problem prevails across the country. Are you satisfied with the government assurance?AH: The government is concerned about the energy crisis. They are also working on it. But, it will be a very tough for the next government if the decision is taken by the present government. So, now we are in dilemma.EP: Some groups in the country have been demanding cancellation of agreements with international oil companies and ouster of the IOCs. How do you consider the demand?AH: Direct cancellation of an agreement signed by a sovereign government creates an environment of mistrust about the country. It’s not comfortable at al for a country for its image abroad. I think the government should sit with the people who are demanding to scrap the agreements. At the same time the government should also sit with the parties with whom it signed the agreements. It will pave the way for an amicable solution for all. If there is any clause which is against the interest of the country, it will be detected in the discussion table. And I think we’ll be able to resolve it with consensus. People in the government responsible for this shouldn’t linger the process and reach consensus through discussions.EP: Better Business Forum discussed about another aspect… If you want uninterrupted energy supply, the price must be marked-based. What’s your opinion?AH: As a consumer I’ll never want that the price of gas and power is increased. But as a businessman and a conscious citizen I must consider the amount of subsidy being given by the government and how long the government can continue it. The previous governments had talks about price hike and the present government has also been discussing about it. If we want energy supply for overall development of the country we have to pay the actual price that it should be. A time will come when we’ll have no alternative but to fix the market-oriented price.EP: How do you look into the regional cooperation in the energy sector as well as proposed tri-nation gas pipeline?AH: The days of keeping ourselves isolation are over. There is no alternative to regional cooperation. If we are benefited from a tri-nation gas pipeline, if our energy demand is fulfilled why not we’ll go for it. Any project in the energy sector if it’s beneficial for the nation must be welcomed. You know economic development is not possible without cooperating each other.EP: What’s your opinion about the present debate on offshore exploration?AH: I think we don’t have time to waste for offshore oil and gas exploration. We need new gas discoveries. For this we need new exploration. I believe we�ll find new gas reserves if we go for exploration in the Bay of Bengal. if there is any opposition from our neighbors we can resolve it through diplomatic channel. Also, we have to work to determine our maritime area. But, for this excuse we can’t suspend our exploration. Not only in the sea, we also need onshore exploration. The BAPEX has been strengthened. Alongside BAPEX, we have to bring foreign investment in a transparent manner. It has no alternative. This will also help to build our own resources and develop human resources. Time has come to take decision. If we don’t decide and waste time our economic development will come to a halt. Everyone has to understand it. You know the result in the energy sector is belated, it takes time.EP: It’s said that the private sector of the engine of development. That’s why the conception of public-private partnership has emerged. How can we go for result oriented such partnership?AH: Look, the energy is an investment-intensive sector. Also, skills technical capacity is very important. The government has to create opportunities to develop the capability. Specially the government has to initiate special steps so that local companies can come forward. There can be one option that a foreign company will get incentive if it has local companies as partners. Also, there should be options so that domestic companies can work with government companies on the basis of partnership. This will help development of local private sector in the energy sector. I think, there are opportunities to build public-private partnership keeping the BAPEX in the center of the projects.Finally, I think the government has to formulate policy for flourishing the local private sector by increasing their skills and capacity and creating an environment for flourishment of their capital. It will ensure participation of local private sector in the energy field of the country.

Sunday, August 31, 2008

Business leaders of different chamber bodies of northern districts at a discussion at a city hotel yesterday urged the government to move to develop the Phulbari coal mine without any further delay.They saw the huge coal reserve at the Phulbari coal mine as the only option now to deal with future energy crisis, particularly in power generation.“We can easily produce 3,500MW of electricity from the coal to be extracted from the Phulbari mine,” said Rangpur Chamber President Mostafa Azad Chowdhury, adding that as the country's gas reserve is depleting fast, coal is becoming the only option for power generation.Greater Rangpur-Dinajpur Industry-Business Development Forum organised the discussion on 'Industrialisation in Rangpur-Dinajpur: Energy availability' at Sheraton Hotel with President of the forum Nazrul Islam in the chair.Former PDB member Fazlul Haque presented a keynote paper on the topic.Former lawmakers Mizanur Rahman Manu and Asaduzzaman Noor, leaders of eight chambers of the northern districts -- Rajshahi, Dinajpur, Rangpur, Lalmonirhat, Nilphamari, Gaibandha, Panchaghar and Joypurhat -- also spoke at the function.The speakers, supporting the open pit mining at Phulbari coal mine as it provides more than 80 percent extraction of resources, urged the government to ensure proper compensation to those who would be affected by the development of the mine.“The authorities concerned have to ensure that the affected people would be properly compensated and rehabilitated,” said former LGED chief engineer Monwar Hossain Chowdhury.If the government fails to take the decision in proper time to extract coal from Phulbari mine, Bangladesh might lose the opportunity to use its coal, as there might be a bar on coal extraction worldwide in future, he added.Former BGMEA president Tipu Munshi expressed his frustration over the poor attention of the government to the development of mineral resources of the northern region.He further said the people of the northern region should not be deprived of coal resources due to the antipathy by a section of people.Forum leader MA Majid termed the opposition to coal extraction in Phulbari an international conspiracy.Editor of the Bangladesh Observer Iqbal Sobhan Chowdhury suggested that those who oppose open pit mining and those support open pit should sit together to reach a consensus through a logical debate.Our Staff Correspondent adds: Different political and student organisations yesterday observed the second anniversary of the Phulbari Day.On this day in 2006, seven people were killed as police open fired to the people of Phulbari and adjoining upazilas who joined a peaceful programme to lay siege the office of Asia Energy Corporation (AEC) in Phulbari. The National Protection Committee for Oil, Gas Minerals and Port placed floral wreaths at the Central Shaheed Minar commemorating the sacrifices of the martyrs of Phulbari movement, observed one-minute silence there and held a brief rally.The leaders at the rally demanded the ousting of Asia Energy, banning export of coal, ensuring cent percent ownership of people on the country's energy resources and implementation of Phulbari accord signed between the people of the area and the government.Communist Party of Bangladesh, Workers Party of Bangladesh, Bangladesh Samajtantrik Dal, Bangladesh Shamyabadi Dal, National Awami Party, Left Democratic Front, Democratic Left Alliance, Revolutionary Workers Party, Gano Shanghati Andolan, Bangladesh Paribesh Andolan, Bangladesh Jubo Union, Bangladesh Chhatra Union (BCU), Pragatisheel Chhatra Jote (PCJ), Samajtantrik Chhatra Front (SCF), Biplobi Chhatra Maitri, Green Voice and other organisations also placed wreaths at the Central Shaheed Minar.Meanwhile, PCJ, BCU and SCF held processions and rallies on the Dhaka University campus demanding the cancellation of the draft coal policy terming it anti-national interest policy and implementation of the Phulbari accord.Shangskritir Naya Shetu, a non-political student organisation, also arranged a poster and paper clippings exhibition and staged a street drama at Ducsu premises.

Sunday, July 27, 2008

The main problem for coal extraction is the indecision of the govt. The speakers took part in the debate over coal extraction and said there is no alternative of coal extraction and the govt. need to take decision immediately in this regard. But, few of them opined to approve the coal policy first. Dr. Badrul Imam, Prof of Geology at Dhaka University said all the issues like investment proposal, royalty, private-public partnership etc are incorporated in the coal policy, so the coal policy should be finalized first. The other issues, not included in the policy can be resolved through discussion. Mr. Kamrul Islam Siddique, former Chairman of PDB said there are three investment proposals for coal mine development have been awaited for govt.’s approval. These proposals should be approved reviewing the existing Environment Act and Minerals Rules without any delay. Dr. Izaz Hossain, Professor of Chemical Engineering at BUET said a small but economically viable pilot project which is acceptable to all can be started after govt.’s approval; and large scale mining will be commenced minimizing the difficulties arises in the pilot project. The country’s coal reserve can be used to generate electricity of 20,000-MW over a period of next 20 to 30 years. Therefore, coal needs to be extracted depending not on gas only. SM Mahfuzur Rahman, Prof. of Economics at Dhaka University said the crisis for gas is alarmingly increasing day by day, and it may happen that coal will to be extracted using candle light. Renewable energy is not sufficient to meet the energy crisis. Dr. M Tamim, Special Assistant to CA for Power, Energy and Mineral Resources said the coal policy has been sent to the Advisory Council, and the present investment proposals will be approved by open tendering process following approval of the Advisory Council.

Monday, July 14, 2008

The government plans to stop using natural gas for electricity generation after 2011, as it faces shortages of fossil fuel..At present 85 percent of electricity is produced by natural gas. Because of the gas shortage, Tamim suggested use of coal as a fuel for electricity generation.Bangladesh has five coal fields with more than 2.55 billion tonnes of reserves, officials said. "To meet the 300 times more demand for electricity we will require to invest up to $10 billion over the next 20 years," Tamim said. He said entrepreneurs from Bangladesh will be allowed to invest 51 percent in state-run plants to modernise them, which will help to raise power generation by at least 2,000 MW.The reserves of natural gas are depleting fast and the country is now facing up to 150 million cubic feet (mmcfd) of gas shortages every day," said Jalal Ahmed, chairman of Petrobangla, government oil and gas agency.Only 30 percent of Bangladesh's more than 140 million people have access to electricity, he said."The present per capita electricity consumption is 117 KWH (kilo-watts hour), nearly 6 percent of the world average," he said. Because of old plants, Bangladesh on average can produce only 3,200 megawatts (MW) of electricity, against an installed capacity of 5,200 MW, officials said."Over the next 20 years as we plan to become a middle income country by raising our economic growth to at least 10 percent from 6 percent now, the country will have to produce about 13,000 MW," Tamim told a meeting attended by senior officials, business leaders, representatives of development partners and energy experts.Natural gas is the prime feedstock for producing fertiliser, vital to raise grain production to ensure food security in the country. Also government plans to open its power sector to private investment to help it out of a long-running and deepening crisis, official said."A policy is being finalised to give private sector full support, which will enable them to invest even in the state-run power plants and make then more productive," said M. Tamim, special assistant to the chief of Bangladesh's caretaker government, responsible for power, energy and mineral resources.